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Lucent Workers Settlement Protects Health Security, Jobs
CWA reached a tentative 7-year, 7-month agreement with Lucent Technologies that greatly reduces the company's demands for substantial health care cost shifting of premiums to active and retired workers and achieves new job security gains. The contract will remain in effect through May 2012.
During intense bargaining sessions, CWA negotiators fought hard to safeguard health care for workers and retirees and jobs for the future. Demonstrations at Lucent locations nationwide and the strong support of retirees were a big factor in gaining an agreement that addressed members' key concerns.
The parties pushed back the contract expiration by a week as they continued efforts to reach agreement with a looming strike threat. The Federal Mediation and Conciliation Service and Director Jack Sweeney assisted the parties in the talks.
The settlement increases wages by a compounded 16.28 percent over the contract term, provides a $1,000 ratification bonus and includes a cost-of-living adjustment beginning in 2008. Pension bands will increase by 12 percent in the first year of the contract.
The agreement also calls for a no-layoff guarantee for installers and opens up new job opportunities for installation employees.
Contract explanation materials and sessions have been held with the ratification vote to be announced Dec. 17.
Ralph Maly, CWA vice president for communications and technologies, said the negotiations were difficult because CWA had to "balance the realities of Lucent's financial situation, our desire for the company's long-term success, and our determination to protect the people who built the company from a devastating blow to their retirement security. We believe we have found the best compromise for both parties under difficult circumstances."
Maly also stressed the critical need for a national solution to the health care crisis, to end the growing efforts by corporations to shift increasing health care costs to workers.
"What we have done in this agreement will help ensure the survival of health care coverage for our members and retirees," he said. Lucent has about 120,000 union-represented retirees and dependents and only 3,400 active union workers.
For retirees, the settlement calls for some increases in medical co-payments and deductibles, and requires them to share the cost of premiums beginning in 2005. Pre-age 65 single retirees will contribute 3 percent of their monthly pension rate for health care, or about $28.50 on average. Family coverage for pre-age 65 retirees will be 5 percent of the monthly pension rate, about $47.50 on average. Post-age 65 retirees will pay 2 percent of their monthly pension for single coverage and 4 percent of their monthly pension for family coverage. Contributions for both groups will increase by one half of one percent per year over the contract term. Workers who retired prior to March 1, 1990 will continue to have employer paid premiums.
These costs are dramatically lower than Lucent's initial proposals, which sought to shift as much as $700 a month in family premium costs to retirees.
A jointly administered VEBA (Voluntary Employee Benefit Associations) trust fund was established to help defer future retiree health care liabilities; Lucent will be obligated to contribute $400 million to this fund over the life of the contract, with an additional $29 million to be contributed from the existing VEBA in 2005.
For active workers, there will be some increases in co-pays and deductibles, in addition to premium contributions phased in over the contract term and reaching a maximum of $45 per month for single coverage and $60 for a family.
During intense bargaining sessions, CWA negotiators fought hard to safeguard health care for workers and retirees and jobs for the future. Demonstrations at Lucent locations nationwide and the strong support of retirees were a big factor in gaining an agreement that addressed members' key concerns.
The parties pushed back the contract expiration by a week as they continued efforts to reach agreement with a looming strike threat. The Federal Mediation and Conciliation Service and Director Jack Sweeney assisted the parties in the talks.
The settlement increases wages by a compounded 16.28 percent over the contract term, provides a $1,000 ratification bonus and includes a cost-of-living adjustment beginning in 2008. Pension bands will increase by 12 percent in the first year of the contract.
The agreement also calls for a no-layoff guarantee for installers and opens up new job opportunities for installation employees.
Contract explanation materials and sessions have been held with the ratification vote to be announced Dec. 17.
Ralph Maly, CWA vice president for communications and technologies, said the negotiations were difficult because CWA had to "balance the realities of Lucent's financial situation, our desire for the company's long-term success, and our determination to protect the people who built the company from a devastating blow to their retirement security. We believe we have found the best compromise for both parties under difficult circumstances."
Maly also stressed the critical need for a national solution to the health care crisis, to end the growing efforts by corporations to shift increasing health care costs to workers.
"What we have done in this agreement will help ensure the survival of health care coverage for our members and retirees," he said. Lucent has about 120,000 union-represented retirees and dependents and only 3,400 active union workers.
For retirees, the settlement calls for some increases in medical co-payments and deductibles, and requires them to share the cost of premiums beginning in 2005. Pre-age 65 single retirees will contribute 3 percent of their monthly pension rate for health care, or about $28.50 on average. Family coverage for pre-age 65 retirees will be 5 percent of the monthly pension rate, about $47.50 on average. Post-age 65 retirees will pay 2 percent of their monthly pension for single coverage and 4 percent of their monthly pension for family coverage. Contributions for both groups will increase by one half of one percent per year over the contract term. Workers who retired prior to March 1, 1990 will continue to have employer paid premiums.
These costs are dramatically lower than Lucent's initial proposals, which sought to shift as much as $700 a month in family premium costs to retirees.
A jointly administered VEBA (Voluntary Employee Benefit Associations) trust fund was established to help defer future retiree health care liabilities; Lucent will be obligated to contribute $400 million to this fund over the life of the contract, with an additional $29 million to be contributed from the existing VEBA in 2005.
For active workers, there will be some increases in co-pays and deductibles, in addition to premium contributions phased in over the contract term and reaching a maximum of $45 per month for single coverage and $60 for a family.